Raisio plc’s Interim Report 1-9/2018: Raisio’s Q3 down by Russian import ban on fish feeds

Raisio plc, Interim Report 7 November at 8:30 a.m. Finnish time

RAISIO’S Q3 DOWN BY RUSSIAN IMPORT BAN ON FISH FEEDS

July-September 2018, continuing operations

• The Group’s net sales totalled EUR 63.1 (67.7) million. EBIT was EUR 7.8 (10.3, and comparable EBIT 10.8) million, accounting for 12.3 (15.3, and comparable EBIT 15.9) % of net sales.
• The Healthy Food Division’s net sales totalled EUR 51.9 (48.9) million, while comparable net sales remained at the last year level. EBIT was EUR 7.3 (9.3) million, accounting for 14.1 (19.0) % of net sales.
• The Raisioaqua Division’s net sales totalled EUR 10.9 (18.4) million. EBIT was EUR 0.9 (2.7) million, accounting for 8.6 (14.8) % of net sales.

January-September 2018, continuing operations

• The Group’s net sales totalled EUR 172.6 (180.9) million. Comparable EBIT was EUR 20.6 (29.2) million, accounting for 11.9 (16.1)% of net sales. EBIT was EUR 18.6 (56.4) million, accounting for 10.8 (31.2)% of net sales. The comparison period EBIT includes sales profits of EUR 28.3 million for the Southall factory property.
• The Healthy Food Division’s net sales totalled EUR 147.8 (150.8) million. Comparable EBIT was EUR 22.5 (29.8) million, accounting for 15.2 (19.8)% of net sales. EBIT was EUR 22.3 (29.8) million, accounting for 15.1 (19.8)% of net sales.
• The Raisioaqua Division’s net sales totalled EUR 23.9 (29.2) million. EBIT was EUR 0.2 (3.1) million, accounting for 1.0 (10.5)% of net sales.

CEO’S REVIEW

“The divestment of our cattle feed business, reviewed by the Competition and Consumer Authority for the entire review period, was completed after the review period. The business transferred to the new owner on 1 November 2018 at the enterprise value of EUR 34 million. Raisio’s sales profit will total some EUR 12.5 million. With the sale of the cattle feed business, Raisio continues to focus on healthy, plant-based food and fish feeds. Strong megatrends support both of these businesses.

EBIT for Raisio’s Q3 was down from the comparison period, particularly due to the interrupted export of Raisioaqua’s fish feeds to Russia. The Division’s EBIT decreased by EUR 1.8 million and net sales by EUR 7.6 million from the comparison period. Active work is continued to lift the Russian import ban. At the moment, it is not possible to determine the exact date for the reopening of the Russian border.

Raisio also increased, as planned, marketing investments in its key brands Benecol and Elovena by some EUR 1 million to boost the sales of new products.

In line with our plans, we have initiated corrective measures in the markets where the development of net sales and profitability did not meet the expectations in the first half of the year. Thanks to the price increases carried out in Russia, net sales and profitability in local currency already returned to the comparison period level. In Poland, we have focused on our core business and carried out reorganisation measures. As a result, the net sales decline has been stopped and the negative performance of the first half of the year reversed. The Irish business previously run by an external distributor was taken over by Raisio’s own organisation in September. This change in the operating model allows the growth focus in the market where the Benecol brand already has a strong position.

An exceptionally dry growth season resulted in the lowest Finnish grain harvest in over 30 years. The grain harvest in Europe was also down from last year. In Finland, the grain price has significantly increased since last spring. With our strong brands, we can shift higher raw material costs to product prices.

Consumer interest in plant-based food continues to grow. Oat demand also continues to boom. At the end of August, Raisio launched a new oat innovation. Elovena Muru Oat Mince is a convenient product with plenty of oat, protein and fibre. Elovena Muru can be used in the same way as minced meat in all cooking, which multiplies its growth potential. Consumers have welcomed the novelty enthusiastically, and Elovena Muru has quickly gained a position where it can compete for the market leadership of the category.”

OUTLOOK UNCHANGED

Raisio expects net sales of the Group’s continuing operations to total some EUR 230 million in 2018. The company estimates that the comparable EBIT for the Group’s continuing operations is some 12 per cent of net sales. Exchange rates will continue to significantly affect Raisio’s net sales and EBIT.

In addition to foods and fish feed sales, Raisio’s net sales for continuing operations consist of grain trade. Raisio has identified the problem areas and initiated corrective measures in the markets where the net sales development did not meet expectations in early 2018.

Raisio’s key strategic target is to grow its Healthy Food business both organically and through acquisitions. With its structural reforms completed, Raisio has targeted all the resources to support its new Healthy Food Division’s medium-term organic growth. Raisio also seeks growth through acquisitions. The company is net debt free and has a strong balance sheet, which allows acquisitions that suit the company’s core business.

In Raisio, 7 November 2018

Raisio plc’s Board of Directors

Further information:
Pekka Kuusniemi, President and CEO, tel. +358 50 537 3883
Heidi Hirvonen, Communications and IR Manager, tel. +358 50 567 3060

CEO’s video in English will be available on Raisio’s web site at www.raisio.com.

Raisio will publish its 2018 Financial Statements Bulletin on 12 February 2019.

The interim report has not been audited.

Raisio plc

Raisio is an international company specialised in healthy, responsibly produced food. Our well-known brands include, for example, Benecol, Elovena, Nalle and Sunnuntai. In Raisio’s products, the focus is on well-being, health, good taste and sustainable development. Profitable growth is ensured through our strong expertise and passion for creating new. Raisio’s shares are listed on Nasdaq Helsinki Ltd. In 2017, the Group’s net sales for continuing operations totalled EUR 307 million and comparable EBIT was EUR 38 million. Our food is good for Health, Heart and Earth. For more information on Raisio go to www.raisio.com.

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